Credit Suisse Raises TripAdvisor PT, Notes Hotel Shopper/Demand Growth Continues To 'Shine'

In a report published Thursday, Credit Suisse analyst Stephen Ju commented on

's first quarter results in which the company's reported revenue of $363.0 million exceeded his $356.1 million estimate, demonstrating strong growth. Ju noted that the "highlight" of TripAdvisor's quarter was the reported hotel shopper growth of 26 percent and monthly active user growth of 31 percent. The analyst argued that these metrics suggested the company's TV campaign is having a "positive effect" in attracting incremental demand onto the platform. Moreover, the launch of the Viator marketplace in the first quarter and continued acquisitions in the restaurant space further "expanded" supply for the company. "While we expect near-term operating deleverage given increased offline marketing spend ahead of peak travel season, we believe this is the correct long-term strategy as TripAdvisor is incrementally well positioned to leverage its content advantage and monetize against growing traffic," Ju wrote. As such, Ju updated his 2015 estimates and now expects the company to report $1.60 billion in revenue (versus a prior estimate of $1.5943 billion) and earn $2.21 per share (versus a prior estimate of $2.20). The analyst also updated his net income projection to $252.3 million (versus a prior estimate of $246.3 million). Bottom line, Ju is maintaining a bullish thesis on the company based on growing consumer awareness and the resulting increase in CPC-based revenue. Shares remain Outperform rated with a price target raised to $91 from a previous $90.